Honda takes Chinese competitor to Beijing IP Court in rare patent assertion for the Japanese company
13Feb18

Honda Motor has asserted two patents against Chinese carmaker Great Wall Motors, according to a recent announcement by the Beijing IP Court. The case stands out for being a relatively rare competitor dispute in the automotive sector, as well as one of the very few occasions that we have seen Honda on the plaintiff side of a patent case. As a result, it's fair to say that this is not a step that the company would have taken lightly.

The Beijing IP Court said it had accepted the two suits in a statement made on 31st January, but it appears that the cases may have been filed as far back as October. The Japanese automaker is demanding over 200 million yuan ($32m) in damages for the infringement of two invention patents, both filed in 2006. The first is titled “Hatchback door structure for vehicles” and has just a Japanese counterpart. The second, covering “Garnish attachment structure of vehicle body”, has family members in the US and Europe as well.

Honda identifies the infringing model as Great Wall’s Haval H6, which has been China’s top-selling sport utility vehicle for six years running. The H6 has accounted for around half of Great Wall’s total units sold in recent years. In the Chinese market it competes directly with Honda’s CR-V, which the company markets through a joint venture with Dongfeng Motor Group. Great Wall has indicated that it intends to fight the suit, which also names Beijing Boshilian Auto Sales Center as a defendant.

Like many automakers, and many large Japanese corporates, Honda seldom enforces its sizable patent portfolio (second only to Toyota’s) against other major industry players. A review of US litigation records show the company has asserted patents in just three instances over the last 15 years, in each case against smaller parts suppliers. Increasingly a target of NPE litigation in the sector, Honda is a member of defensive alliances including AST and the LOT Network.

But it will not be the first go-round in China for a Honda IP team led by general manager Yuichiro Kawamura. A design patent dispute against Shuang Huan Automobile it initiated in 2003 went all the way to the Supreme People’s Court (SPC), and there was not much for Honda to be happy about in the final judgment. In a top 10 ‘IP guiding case’ of 2015, the SPC confirmed that Shuang Huan’s product did not infringe Honda’s design patent. Furthermore, it ruled that Honda’s sending of cease and desist letters to Shuang Huan’s distributors breached China’s Anti-Unfair Competition Law. After 12 years, it was the Chinese defendant who walked away with about $2.5 million in damages.

IP litigation in China’s auto industry has mainly consisted of foreign companies accusing Chinese firms of copying external designs. Other examples from inside and outside the country include GM going after China’s Chery, Fiat suing Great Wall in Europe and Jaguar Land Rover taking on Jiangling Motors. So it is notable that this time Honda is relying on invention patents only, and is describing this as a dispute over technology, not just products.

Honda appears to be undeterred by its drawn-out and unsuccessful past attempt to enforce IP rights in Chinese courts - or may feel that it has been left with no other option. But today’s patent environment in China is a world away from that of 2003. In the meantime, the country has become much more important to the global auto supply chain, generating patent disputes across a range of technology fields. That will ensure that this case has a very large global audience.

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